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RBI mandates PPI interoperability, hikes limit to ₹2 lakh, allows cash withdrawal

Current · Source: Reserve Bank of India · RBI/2021-22/40 · issued 19 May 2021 · ~2 min read

Quick answerRBI mandates full-KYC PPI interoperability via UPI/card networks by March 31, 2022, raises wallet limit to ₹2 lakh, and permits cash withdrawal from non-bank PPIs up to ₹2,000 per transaction (₹10,000/month).

The rule, in the simplest words

By March 31, 2022, all full-KYC (fully verified customer) prepaid cards and wallets must work with other systems like UPI (a payment system) and card networks, so you can use them anywhere.
The maximum money you can keep in a full-KYC prepaid card or wallet is now ₹2 lakh (up from ₹1 lakh).
Non-bank prepaid card or wallet companies can now let you take out cash, but only up to ₹2,000 per time and ₹10,000 per month, and you must use a PIN or extra security step.
After opening or adding money to a prepaid card or wallet, there must be a waiting period (cooling period) before you can take out cash, to stop fraud.

How it plays out — a real example

Ravi, a KYC & compliance officer in Indore, sees a customer who wants to use her full-KYC wallet to pay for a gold loan. Thanks to the new rule, Ravi can accept the payment through UPI, even though his bank's system is different from the wallet company's. Later, the same customer asks to withdraw ₹1,500 cash from her wallet at Ravi's branch; Ravi checks the ₹2,000 per-transaction limit and the ₹10,000 monthly cap, then processes the withdrawal after the customer enters her PIN.

What changed

RBI made interoperability mandatory for full-KYC PPIs (cards and wallets) through authorised card networks and UPI, effective March 31, 2022. The maximum balance for full-KYC PPIs was doubled from ₹1 lakh to ₹2 lakh. Non-bank PPI issuers can now offer cash withdrawal, capped at ₹2,000 per transaction and ₹10,000 per month per PPI, with AFA/PIN authentication and a cooling period.

What it means for you

Banks and non-bank PPI issuers must enable interoperability, increasing competition and customer convenience. The higher limit and cash withdrawal feature make PPIs more attractive for daily transactions, potentially reducing reliance on bank accounts for small payments. Issuers need to invest in UPI and card network integration, and implement robust fraud controls and customer redressal mechanisms.

What you must do

Integrate full-KYC PPIs with UPI and authorised card networks by March 31, 2022.
Update system limits to allow maximum outstanding of ₹2 lakh for full-KYC PPIs.
Enable cash withdrawal for non-bank PPIs with ₹2,000 per transaction and ₹10,000 monthly cap, using AFA/PIN.
Implement a cooling period for cash withdrawals after PPI opening or reloading.
Set up customer redressal mechanisms and align with ombudsman schemes for cash withdrawal complaints.

Who it affects

All bank and non-bank PPI issuers, System providers and system participants, Full-KYC PPI holders, Mass transit PPI issuers (exempted), Gift PPI issuers (optional interoperability)

❓ Common questions

Regulatory timeline

Stated effective date effective March 31, 2022
Decoded by BankPulse 2026-06-18 08:03 IST

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

What is the deadline for enabling PPI interoperability?

PPI issuers must enable interoperability for full-KYC PPIs through authorised card networks and UPI by March 31, 2022.

What are the cash withdrawal limits for non-bank PPIs?

Cash withdrawal is limited to ₹2,000 per transaction and ₹10,000 per month per PPI, with AFA/PIN authentication and a cooling period after opening or reloading.

Are mass transit PPIs required to offer interoperability?

No, PPIs for Mass Transit Systems (PPI-MTS) are exempted from the interoperability mandate.

📜 Read the original circular — full text as issued by RBI

RBI/2021-22/40
 DPSS.CO.PD.No.S-99/02.14.006/2021-22
 May 19, 2021
 All Bank and Non-Bank Prepaid Payment Instrument Issuers,
 System Providers and System Participants
 Madam / Dear Sir,
 Prepaid Payment Instruments (PPIs) –
 (i) Mandating Interoperability;
 (ii) Increasing the Limit to ₹2 lakh for Full-KYC PPIs; and
 (iii) Permitting Cash Withdrawal from Full-KYC PPIs of Non-Bank PPI Issuers
 This has reference to paragraphs 10 and 11 of the Statement on Developmental and Regulatory Policies dated April 07, 2021 wherein it was announced that (a) PPI interoperability shall be made mandatory, (b) the limit for full-KYC PPIs shall be increased from ₹1 lakh to ₹2 lakh, and (c) cash withdrawal shall be permitted using full-KYC PPIs of non-bank PPI issuers.
 2. A reference is also invited to the Master Direction DPSS.CO.PD.No.1164/02.14.006/2017-18 dated October 11, 2017 on Issuance and Operation of PPIs (as amended from time to time) and Circular DPSS.CO.PD.No.808/02.14.006/2018-19 dated October 16, 2018 on PPIs – Guidelines for Interoperability.
 3. Accordingly, the following are advised –
 It shall be mandatory for PPI issuers to give the holders of full-KYC PPIs (KYC-compliant PPIs) interoperability through authorised card networks (for PPIs in the form of cards) and UPI (for PPIs in the form of electronic wallets);
 Interoperability shall be mandatory on the acceptance side as well;
 The interoperability shall be enabled by March 31, 2022; and
 PPIs for Mass Transit Systems (PPI-MTS) shall remain exempted from interoperability while Gift PPI issuers have the option to offer interoperability.
 4. The maximum amount outstanding in respect of full-KYC PPIs (KYC-compliant PPIs) has been increased from ₹1 lakh to ₹2 lakh. All other conditions mentioned under paragraphs 9.1 (ii) and 9.2 of the Master Direction on PPIs dated October 11, 2017 shall continue to be applicable.
 5. The feature of cash withdrawal shall be permitted in respect of full-KYC PPIs issued by non-bank PPI issuers as well. The following conditions shall, however, be applicable –
 Maximum limit of ₹2,000 per transaction with an overall limit of ₹10,000 per month per PPI;
 All cash withdrawal transactions performed using a card / wallet, shall be authenticated by an Additional Factor of Authentication (AFA) / PIN;
 Any PPI issuer offering this facility shall put in place proper customer redressal mechanisms. Complaints in this regard shall fall under the ambit of the respective ombudsmen schemes and instructions on limiting liability of customers; and
 PPI issuers shall put in place suitable cooling period for cash withdrawal upon opening the PPIs or loading / re-loading of funds into PPIs to mitigate the risk of fraudulent use of PPIs.
 6. The cash withdrawal limit from Points of Sale (PoS) terminals using debit cards and open system prepaid cards issued by banks in India advised vide circular DPSS.CO.PD.No.449/02.14.003/2015-16 dated August 27, 2015 has also been rationalised to ₹2,000 per transaction within an overall monthly limit of ₹10,000 across all locations (Tier 1 to 6 centres). The requirement of submission of data to RBI mentioned at paragraph 6 of the circular has been dispensed with. All other provisions shall, however, continue to be applicable.
 7. The Master Direction on Issuance and Operation of PPIs dated October 11, 2017 (as amended from time to time) is being modified to reflect the above.
 8. These instructions are issued under Section 18 read with Section 10(2) of the Payment and Settlement Systems Act, 2007.
 Yours faithfully,
 (P. Vasudevan)
 Chief General Manager

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2021-22/40 · issued 19 May 2021. The plain-English explanation above is BankPulse’s own independent summary.

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Who does what — compliance checklist

💻 IT / Systems

Update system limits to allow maximum outstanding of ₹2 lakh for full-KYC PPIs.

📜 Compliance

Integrate full-KYC PPIs with UPI and authorised card networks by March 31, 2022.
Enable cash withdrawal for non-bank PPIs with ₹2,000 per transaction and ₹10,000 monthly cap, using AFA/PIN.
Implement a cooling period for cash withdrawals after PPI opening or reloading.
Set up customer redressal mechanisms and align with ombudsman schemes for cash withdrawal complaints.

Grouped from the action items above — a single circular may involve more than one team.

Worked example & action-note template

Example: if you are a Compliance officer at a bank this circular applies to (All bank and non-bank PPI issuers, System providers and system participants, Full-KYC PPI holders, Mass transit PPI issuers (exempted), Gift PPI issuers (optional interoperability)), your first concrete step on “RBI mandates PPI interoperability, hikes limit to ₹2 lakh, allows cash withdrawal” is: “Integrate full-KYC PPIs with UPI and authorised card networks by March 31, 2022.” (RBI issued this 19 May 2021).

Circular: RBI/2021-22/40 -- RBI mandates PPI interoperability, hikes limit to ₹2 lakh, allows cash withdrawal
Issued: 19 May 2021
Action required: Integrate full-KYC PPIs with UPI and authorised card networks by March 31, 2022.
Action required: Update system limits to allow maximum outstanding of ₹2 lakh for full-KYC PPIs.
Action required: Enable cash withdrawal for non-bank PPIs with ₹2,000 per transaction and ₹10,000 monthly cap, using AFA/PIN.
Action required: Implement a cooling period for cash withdrawals after PPI opening or reloading.
Action required: Set up customer redressal mechanisms and align with ombudsman schemes for cash withdrawal complaints.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________

Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.

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BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12094&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.